PNB Q1 Net dips 49% to Rs 721 cr on higher provisioning

Country's second largest PSU lender Punjab National Bank (PNB) today posted a 48.68 per cent plunge in its first quarter net profit at Rs 721 crore, dragged down by higher bad loan provisioning and subdued credit growth.
The bank's net profit for the June quarter a year ago stood at Rs 1,405 crore, it said in a statement.
The gross non-performing assets (NPAs) increased to Rs 25,397 crore in the June quarter as against Rs 19,603 crore in the same period last year, the statement said.
The gross NPAs of the bank as a percentage of total advances rose to 6.47 per cent during the April-June quarter, compared with 5.48 per cent in the year-ago period.

The bank's provisioning during the June quarter rose to Rs 1,811 crore, from Rs 928 crore in the corresponding period last fiscal.
"Credit of the Bank for the first quarter of the current fiscal registered a growth of 9.6 per cent to Rs 3,80,880 crore. The growth in credit in the first quarter was not as much as we were envisaging. Probably Q2 is going to be better, Q3 will be still better and I am going to end this year with really wonderful results," PNB Executive Director (with additional charge of MD & CEO) Gauri Shankar said.

Interest income of the bank rose to Rs 12,035 crore during the first quarter, up nearly 4 per cent from Rs 11,589 crore in the corresponding three months' period of 2014-15.

Total income of the bank rose to Rs 13,432 crore in the June quarter, from Rs 12,825 crore in the same period previous fiscal.
The bank today also said that it has reported to the Reserve Bank 400 'wilful defaulters', and plans to sell Non Performing Assets (NPAs) worth up to Rs 3,000 crore to Asset Reconstruction Companies (ARCs) in the current fiscal.
"400 accounts are there (wilful defaulters) which we have reported to RBI so that it (list) can updated on website of RBI," Shankar said here.
He also said the bank has identified corporate accounts and the work is underway for their strategic debt restructuring as per the RBI guidelines.

"Let me tell you, 4-5 companies' accounts (stressed assets), we have already identified. Work is on for strategic debt restructuring, which we are going to do as per RBI guidelines," he said.
"The fresh restructuring done during the first quarter is just Rs 676 crore in 22 accounts," he added. The sectors in which restructuring has taken place include power and steel.